Ideco payments

[Michel]

Hello everyone,

I hope you are all staying safe during these difficult times.

I am finally about to apply to Ideco with Rakuten, I have just received the documents, and I have a question about the payments.

Can I choose to invest let's say 10,000 a month and before the year ends top my account to reach the maximum allowed in one lump sum.
If so how do I do it?

Thanks

[KyushuWoozy]

No you can't, because you set a monthly amount to invest and can change this amount once a year only.

[Edited for clarity]

[Michel]

That 's what I read as well, but I don't think that would work.

If I can only change once a year, let's say I decide to pay 10,000 until December and then in December I decide to cap my Ideco allowance, I will change it to one lump sum of 200,000 let's say. Then in January I'm allowed to another change (if I'm correct) put it back to 10,000 but I won't be able to do it again next December as I have already modified it once in January.

Does that mean it's not possible to do it?

I'm running my own business now and I should be allowed to contribute to up to 68,000 a month but I don't have the financial stability to pay that amount every month at the moment. So depending on my finances at the end of the year I was hoping to balance it and pay the remaining.

[RetireJapan]

That 's what I read as well, but I don't think that would work.

If I can only change once a year, let's say I decide to pay 10,000 until December and then in December I decide to cap my Ideco allowance, I will change it to one lump sum of 200,000 let's say. Then in January I'm allowed to another change (if I'm correct) put it back to 10,000 but I won't be able to do it again next December as I have already modified it once in January.

Does that mean it's not possible to do it?

I'm running my own business now and I should be allowed to contribute to up to 68,000 a month but I don't have the financial stability to pay that amount every month at the moment. So depending on my finances at the end of the year I was hoping to balance it and pay the remaining.

You don't have an annual iDeCo allowance, only a monthly one. Once each month is gone, if you haven't paid in the maximum, the allowance is gone forever. Because of the tax benefits, it is generally worth trying to pay as much as you can into iDeCo (obviously without getting yourself into trouble financially).

[Michel]

Oh I see, I was mixing things with NISA then.

Thank you!

[Wales4rugbyWC23]

That 's what I read as well, but I don't think that would work.

If I can only change once a year, let's say I decide to pay 10,000 until December and then in December I decide to cap my Ideco allowance, I will change it to one lump sum of 200,000 let's say. Then in January I'm allowed to another change (if I'm correct) put it back to 10,000 but I won't be able to do it again next December as I have already modified it once in January.

Does that mean it's not possible to do it?

I'm running my own business now and I should be allowed to contribute to up to 68,000 a month but I don't have the financial stability to pay that amount every month at the moment. So depending on my finances at the end of the year I was hoping to balance it and pay the remaining.

You don't have an annual iDeCo allowance, only a monthly one. Once each month is gone, if you haven't paid in the maximum, the allowance is gone forever. Because of the tax benefits, it is generally worth trying to pay as much as you can into iDeCo (obviously without getting yourself into trouble financially).

I remember discussing on your blog and you said that you could make one off payments for the whole year, is that possible?

[RetireJapan]

I remember discussing on your blog and you said that you could make one off payments for the whole year, is that possible?

I think that is tsumitate NISA, not iDeCo

[Michel]

So I received the documents and there's a "way" to do a lump sum by choosing the amount you want to pay and which month you want to pay.

But you have to decide upfront so if I decide to pay 400,000 yen in December and I can't make it, I'll be putting myself in trouble.

Just thought I'd share the info.

[Jansen]

You could spread out your lump sum payments if you're worried about not being able to afford a single one. Say something like 150,000yen per month for Oct, Nov and Dec. You'll have a monthly payment of 40,000 for the remaining 9 months that you could use to save for the last three. This way, even if you miss payments for Oct and Nov, you could still possibly pay for Dec as long as you manage 40,000 each month (and an additional 30,000 as a fuck me penalty).

Personally, I wouldn't bother. Set the max deduction for each month and if you miss it, so be it. Save what you can and roll it over for the next month.

For my first three years, I had mine set at 50,000 and I still missed 1 - 2 months each year. I was hoping I could finally get a full score this year but who knows?

[Michel]

So you can miss a payment without getting into trouble with the provider?
Do payments get rolled over to the following month?